Summary
Simon Property Group, Inc. (SPG) reported its third-quarter and year-to-date results for 2009, indicating resilience amidst a challenging economic environment. While overall revenue showed a slight decrease compared to the prior year, driven by lower overage rents and management fees, the company maintained stable minimum rents and saw positive leasing spreads in its regional mall portfolio. A significant factor impacting net income was a $140.5 million impairment charge related to its investment in Liberty International PLC, which heavily influenced year-over-year earnings per share comparisons. Despite the economic headwinds, SPG demonstrated strong operational management with reduced operating expenses and effective cost controls. The company also executed strategic financing activities, including issuing new senior unsecured notes and managing its credit facility, to maintain financial flexibility. Liquidity remains robust, with a substantial increase in cash and cash equivalents, providing confidence in meeting near-term obligations and capital needs.
Financial Highlights
28 data points| Revenue | $924.93M |
| Operating Expenses | $532.75M |
| Operating Income | $392.18M |
| Interest Expense | $257.88M |
| Net Income | $105.55M |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 281.43M |
| Shares Outstanding (Diluted) | 282.47M |
Key Highlights
- 1Total revenue for the nine months ended September 30, 2009, was $2.747 billion, a slight decrease from $2.754 billion in the same period of 2008.
- 2Diluted earnings per common share decreased to $0.73 for the nine months ended September 30, 2009, from $1.23 in the prior year, largely due to a $140.5 million impairment charge on the Liberty International investment.
- 3Regional mall comparable sales per square foot declined 11.2% for the nine months, but average base rents increased 2.0%, with positive leasing spreads of 10.6%.
- 4Premium Outlet Centers demonstrated stronger performance with high occupancy (97.5%) and positive leasing spreads of 32.0%, although comparable sales per square foot decreased by 4.5%.
- 5The company raised approximately $3.4 billion in public capital markets during the first nine months of 2009 and reported a significant increase in cash and cash equivalents to $3.7 billion as of September 30, 2009.
- 6Total debt increased slightly to $18.67 billion from $18.04 billion, with a continued focus on fixed-rate debt, which constituted the majority of the company's borrowing.
- 7Operating expenses were reduced through cost control initiatives, with property operating costs decreasing 7.2% and home and regional office expenses down 23.5% for the nine-month period.